Governor Is Mum on Casino Dealings

By

Jacob Gershman

Updated Nov. 26, 2010 12:01 a.m. ET

Gov. David Paterson is refusing to disclose the terms of the state's newly inked compact with a Wisconsin-based tribe to develop a mega-casino in the Catskills, a possible breach of New York's public-disclosure laws.

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A rendering of the entrance to the planned Stockbridge-Munsee casino.
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The decision by Mr. Paterson has deepened suspicions about the gaming plan among lawmakers, state tribal leaders and government watchdogs, who have been critical of the governor for negotiating the deal with the Stockbridge-Munsee with little public involvement.

"There appears to be no valid basis for withholding the compact under the Freedom of Information Law," said Robert Freeman, executive director of the Committee on Open Government, the state body that oversees the public-record statutes.

A spokeswoman for Mr. Paterson said the governor would not make the compact available to the public because it's subject to "ongoing litigation."

The official said the state wouldn't disclose the exact terms before the Obama administration decides whether to approve the project. A lawyer for Stockbridge-Munsee, a former New York state tribe that migrated westward in the early 1800s, said the compact was confidential.

Mr. Freeman said he disputed the governor's interpretation.

"A compact is essentially the same as a contract, and contracts between the government and other parties are accessible," he said.

State Sen. Eric Adams, a Democrat who is chairman of the Racing, Gaming, and Wagering Committee, said he hadn't see the compact, either.

He said Mr. Paterson hadn't responded to a Nov. 19 letter he wrote asking the governor to "suspend any decision" regarding the casino until lawmakers held a hearing to discuss it.

"We've seen no communication at all throughout this entire process," said Mr. Adams in an interview. "I'm hopeful that the incoming governor will be more forthcoming with the information around this."

A spokesman for Gov.-elect Andrew Cuomo said the attorney general is reviewing Mr. Paterson's decision not to release the compact.

Mr. Paterson announced the compact on Monday at a press conference with Stockbridge-Munsee and local officials in Sullivan County, where the tribe and its development partner, Trading Cove Associates, plan to build a 584,000-square-foot casino and resort.

Sullivan County officials, including the county manager and legislative chairman, said they hadn't seen the agreement.

The state's compact was coupled with a land-claim settlement involving a chunk of Madison County over which the tribe had claimed ownership. Under the deal, the tribe agreed to relinquish its claim to the land in exchange for a smaller plot of land in Sullivan. The administration also declined to release the exact terms of that settlement.

In his announcement, the governor said the tribe would distribute 25% of slot-machine revenue to the state. But the compact itself could describe more specifically how money would flow to the state and other investors, and could cast a clearer light on labor and contractual agreements.

"I don't think you keep things secret unless you have something to hide," said Ray Halbritter, head of the Oneida Indian Nation, which for years has clashed with state over land claims and tobacco tax collections. Oneida operates the Turning Stone casino and has long quarreled with Stockbridge-Munsee over land claims.

Critics of the casino say they are skeptical that Mr. Paterson's agreement will clear federal hurdles. The developers must navigate a morass of Indian gaming regulations that have made it nearly impossible for other tribes to pull off such far-flung ventures. Blake Watson, a law professor at the University of Dayton who writes about Indian property law, says he knows of one tribe currently operating a casino outside its home state.

With few exceptions, federal law prohibits Indian tribes from operating casinos on trust lands acquired after October 1988. One of the loopholes allows for gaming on land taken into trust as part of a land-claim settlement with the federal government. That's the key to Mr. Paterson's plan, which is strongly backed by U.S. Sen. Charles Schumer.

"I wouldn't oversell it and say it will certainly happen. And I wouldn't undersell it and say it's never going to happen," Mr. Schumer said. "It's a new and novel approach, and I'm going to push it as hard as I can."

Even if Department of Interior officials support New York's land settlement and agree to put the Sullivan land into trust, the legal obstacles would not go away. The vague wording of statutes and constant tinkering of guidelines has turned the approval process into a spawning ground for court challenges and appeals.

Legal experts say it's not clear whether the land-claim settlement would require approval from Congress, which in 2008 rejected an attempt by two Michigan tribes to open off-reservation casinos using the same type of exception.

"This is going to take many years. It could go well beyond 2012," said Carl Artman, who headed the U.S. Bureau of Indian Affairs during the Bush administration.

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